Letter: Stabilize state funding with a ‘fair sales tax’

In the increasing discussion about adding a sales tax to the mix of taxes in Oregon, I have seen no mention of what might be termed a “fair sales tax.” This would be a tax on all goods and services, including Internet sales, with at least two big exceptions. There would be no sales tax on food or clothing. Such a tax would be only slightly “regressive” (that is, taxing the poor and middle class at a higher percentage rate of their income than the rich are taxed), and would be very close to a “flat tax” (taxing everyone at the same rate).

Why would we even consider such a fair, flat tax to supplement our income tax? After all, the income tax is quite “progressive” (the rich pay somewhat more than the middle class and the poor). The answer lies in stability of funding for our essential public services. Everyone saw, in the still-lingering deep recession, how essential needs went unmet because the income tax varies wildly with the economy, and the property tax cannot pick up the slack. Sales taxes are not subject to such wild swings and provide needed funds when times are tough. And they are much more fair than the property tax, which is a seriously “regressive” tax and is especially hard on senior citizens.

A well-designed mix of a “fair sales tax,” with no tax on food or clothing, along with a progressive income tax and a low property tax, would leave Oregon with a fairer, more stable system of raising needed revenue.

Such a system has been in place for decades in Minnesota. Although I grew up in the Portland area, I have spent the last 40-odd years in Minnesota and just recently moved back to Oregon. I can attest to the fact that in Minnesota even a deep recession led to much smaller decreases in funding for education, health care and all the other services that government provides, compared to Oregon.